Postwar Diplomacy, 1944-1949

By the end of this lesson, students will be able to:

• Account for the design of the Bretton Woods financial system in July 1944 and identify its three principal components: the International Monetary Fund, the International Bank for Reconstruction and Development, and the dollar-gold exchange standard.
• Compare the wartime conferences at Yalta in February 1945 and Potsdam in July 1945, and account for what the differences between them reveal about the deteriorating U.S.-Soviet relationship.
• Account for the founding of the United Nations at San Francisco in June 1945, including the structure of the Security Council and the veto held by the five permanent members, and explain how it differed from the failed League of Nations.
• Trace the opening moves of the Cold War from the Long Telegram of February 1946 through the Truman Doctrine of March 1947, the Marshall Plan of 1948, the Berlin Blockade and Airlift of 1948-1949, and the North Atlantic Treaty of April 1949.
• Account for the two events of 1949 that broke the U.S. atomic monopoly and brought a communist government to power in the largest country in Asia, and explain why those events together pushed American postwar diplomacy toward the militarized containment strategy of the early 1950s.

The first piece of the postwar order was the financial one, and it was built before the war was over. In July 1944, while Allied troops were still fighting through Normandy and Soviet armies were still pushing west toward the Vistula, delegates from forty-four Allied nations met at the Mount Washington Hotel in Bretton Woods, New Hampshire, and over three weeks designed the postwar international monetary system. The conference was the work of two men. Harry Dexter White of the U.S. Treasury and John Maynard Keynes of the British Treasury produced rival plans, and the final agreement leaned heavily on White's. The conference produced two new institutions and one new currency rule. The International Monetary Fund was charged with stabilizing exchange rates and providing short-term loans to nations facing balance-of-payments crises. The International Bank for Reconstruction and Development, later the core of the World Bank, was charged with longer-term lending for postwar reconstruction and development. The currency rule pegged member currencies to the U.S. dollar and pegged the dollar to gold at thirty-five dollars an ounce. The arrangement made the dollar the de facto reserve currency of the noncommunist world, and it gave the United States, which by 1945 held two-thirds of the world's gold reserves, the central place in the postwar global economy (KC-7.3.III.E).

The second piece was political, and it was negotiated by the wartime Big Three at two conferences six months apart. The first was at Yalta, a Black Sea resort in Soviet Crimea, where Franklin Roosevelt, Winston Churchill, and Joseph Stalin met between February 4 and February 11, 1945. With Soviet armies already inside Germany and the Western Allies still on the German border, the bargaining position favored Stalin, and Roosevelt arrived gravely ill. The conference confirmed the unconditional-surrender requirement for Germany and the partition of Germany and Berlin into U.S., British, French, and Soviet occupation zones. It set the dates for a founding conference of the United Nations in San Francisco. It secured a Soviet commitment to enter the Pacific war against Japan within ninety days of the German surrender, in exchange for territorial concessions in Manchuria and the Kuril Islands. And it produced a Declaration on Liberated Europe pledging free elections in the territories the Red Army was then occupying. The free-election pledge was the part of Yalta that fell apart fastest. By the end of 1948 the Soviet Union had installed communist governments across Eastern Europe through fixed elections, coercion, and outright coup, most visibly the February 1948 communist takeover of Czechoslovakia. The Yalta conference has been argued ever since over what Roosevelt could have demanded and what he chose not to (KC-7.3.III.E).

The second wartime summit was at Potsdam, a suburb of bombed-out Berlin, between July 17 and August 2, 1945. The cast had changed. Roosevelt had died in April. Harry Truman, who had been vice president for eighty-two days when he assumed the presidency, was learning the negotiation as he went. Churchill, defeated in the British general election held during the conference, was replaced midway through by Clement Attlee. Only Stalin remained from Yalta, and he held more territory than he had held in February. Truman, who had been informed during the conference of the successful Trinity test of the atomic bomb, was less inclined than Roosevelt had been to defer to Soviet preferences. The conference produced the Potsdam Declaration demanding unconditional Japanese surrender, and it set the framework for the joint occupation of Germany. But on the political questions of Eastern Europe, the German reparations bill, and the future of the wartime alliance, Potsdam recorded disagreement rather than agreement. The deterioration in the U.S.-Soviet relationship between Yalta and Potsdam is the AP exam's most reliably tested transition in this lesson (KC-7.3.III.E).

The third piece of the postwar order was the institutional one. Between April 25 and June 26, 1945, delegates from fifty Allied nations met at the War Memorial Opera House in San Francisco and drafted the United Nations Charter. The structure reflected the lessons that the architects had drawn from the failure of the League of Nations a generation earlier. The General Assembly gave every member nation a vote on broad questions but did not have binding authority. The Security Council held the binding authority. It seated five permanent members — the United States, the Soviet Union, Britain, France, and the Republic of China — each holding a veto over substantive resolutions, plus six (later ten) rotating members elected by the General Assembly. The veto was a deliberate concession to political reality. Without it, neither the United States nor the Soviet Union would have joined, and a United Nations missing both was the Wilsonian League the founders were determined not to repeat. The Senate ratified the Charter on July 28, 1945 by a vote of 89 to 2, an inversion of its 1919 rejection of the League and a measure of how completely interwar isolationism had been abandoned (KC-7.3.III.E).

The fourth piece was the legal one. Between November 1945 and October 1946, an International Military Tribunal sat in the Palace of Justice at Nuremberg and prosecuted twenty-two surviving leaders of the Nazi regime for crimes against peace, war crimes, and crimes against humanity. The London Charter that established the tribunal, signed by the United States, Britain, France, and the Soviet Union in August 1945, fixed individual criminal responsibility for waging aggressive war and for the systematic murder of civilians as a feature of international law. Twelve defendants were sentenced to death, three to life imprisonment, four to fixed terms, and three were acquitted. Subsequent Nuremberg trials prosecuted German doctors, judges, industrialists, and Einsatzgruppen commanders. Parallel International Military Tribunal for the Far East proceedings in Tokyo prosecuted Japanese wartime leaders between 1946 and 1948. The Nuremberg verdicts produced the language and the legal framework that would later anchor the 1948 Universal Declaration of Human Rights and the 1948 Convention on the Prevention and Punishment of the Crime of Genocide (KC-7.3.III.E).

The wartime alliance did not survive 1946. In February of that year, George Kennan, the U.S. embassy charge d'affaires in Moscow, transmitted to Washington the eight-thousand-word cable that history calls the Long Telegram. Kennan argued that the Soviet leadership was driven less by the immediate calculations of national interest than by a fusion of traditional Russian insecurity with Marxist-Leninist ideology, that it could not be made into a partner of the western liberal order, and that the appropriate U.S. response was the long, patient, firm, and vigilant containment of Soviet expansion at every point of attempted advance. A revised version of the argument, signed pseudonymously as Mr. X, appeared in the July 1947 issue of Foreign Affairs and gave containment its public name. Containment supplied the strategic framework for the next forty years of U.S. foreign policy, and Kennan would spend much of the rest of his life arguing that his successors had militarized a strategy he had intended as primarily political and economic (KC-7.3.III.E).

Containment moved from doctrine to policy in March 1947. With Britain announcing that it could no longer afford to support the royalist government of Greece against a communist-led insurgency, and with the Soviet Union pressing Turkey for joint control of the Turkish Straits, the Truman administration concluded that the United States had to step into the British role or accept the loss of the eastern Mediterranean. On March 12, 1947, Truman addressed a joint session of Congress and asked for four hundred million dollars in economic and military aid for Greece and Turkey. He framed the request in unusually sweeping terms: the policy of the United States, he told Congress, must be to support free peoples who were resisting attempted subjugation by armed minorities or by outside pressures. The Truman Doctrine committed the United States to peacetime economic and military assistance to allies far outside the Western Hemisphere, broke openly with the interwar isolationism of the 1920s and 1930s, and supplied the public rationale for every Cold War aid program that followed (KC-7.3.III.E).

The economic counterpart of the Truman Doctrine arrived three months later. In a Harvard commencement address on June 5, 1947, Secretary of State George Marshall proposed that the United States underwrite a coordinated European recovery program. Western Europe in the spring of 1947 was sliding back toward economic collapse. Industrial output was running below prewar levels, the winter of 1946-1947 had been one of the coldest on record, the British and French treasuries were nearly empty, and communist parties in France and Italy were polling above twenty percent. Congress enacted the European Recovery Program in April 1948 and appropriated roughly thirteen billion dollars (about one hundred fifty billion dollars in 2020 dollars) for sixteen Western European recipients between 1948 and 1952. The Marshall Plan rebuilt European industry, restored agricultural production, stabilized currencies, expanded intra-European trade through the Organization for European Economic Cooperation, and tied the recipients to U.S. economic and political leadership for a generation. The Soviet Union refused to participate and forced its East European satellites to refuse as well, hardening the division of Europe that the Truman Doctrine had named in March (KC-7.3.III.E).

The first armed test of the new strategy came in the divided city of Berlin. The Western Allies, increasingly committed to consolidating their three German occupation zones into a viable West German state, introduced a new currency, the deutsche mark, into the western zones in June 1948. Stalin responded on June 24, 1948 by closing all road, rail, and canal routes from western Germany into West Berlin. The blockade was an attempt either to force the Western Allies out of Berlin or to force them to abandon the West German state they were building. The Truman administration chose neither. For the next eleven months the U.S. and British air forces flew the Berlin Airlift, supplying the western half of a city of two million people entirely from the air at an eventual peak of nearly nine thousand tons of food, coal, and supplies per day. Stalin lifted the blockade on May 12, 1949 without achieving either of his objectives. The airlift was the first Cold War test of containment by a credible alternative to war, and it worked (KC-7.3.III.E).

Two weeks before the blockade ended, the Truman administration committed the United States to its first peacetime military alliance since the 1778 treaty with France. On April 4, 1949, representatives of twelve nations — the United States, Canada, Britain, France, Italy, Belgium, the Netherlands, Luxembourg, Norway, Denmark, Iceland, and Portugal — signed the North Atlantic Treaty in Washington. The treaty established the North Atlantic Treaty Organization, and its Article 5 committed each member to treat an armed attack on any one of them as an attack on all and to come to the assistance of the attacked member with whatever action it deemed necessary, including the use of armed force. The Senate ratified the treaty by 82 to 13 in July 1949, a measure of how completely the diplomatic consensus of 1919 had been replaced by a new consensus that the United States could not stand apart from the security of Western Europe. NATO is the longest-lived peacetime military alliance in U.S. history (KC-7.3.III.E).

Two events in late 1949 closed the postwar transition and opened the militarized phase of the Cold War. On August 29, 1949, the Soviet Union detonated its first atomic weapon at the Semipalatinsk test site in Kazakhstan, breaking the U.S. atomic monopoly four years sooner than American planners had projected. On October 1, 1949, the Communist Party of China under Mao Zedong proclaimed the founding of the People's Republic of China after the defeat of the Nationalist forces of Chiang Kai-shek, ending a Chinese civil war that had run intermittently since 1927. To Americans the two events looked like a coordinated communist advance, although they were not. The combined shock pushed the Truman administration to launch the National Security Council Study Memorandum 68 review of U.S. national strategy, and on June 25, 1950, the North Korean army crossed the thirty-eighth parallel and invaded the Republic of Korea, opening the war that the next lesson takes up. By the close of 1949 the structures of the Cold War were in place: a divided Germany, a divided Europe, a divided Korea, two atomic powers, two rival alliance systems, and a United Nations whose Security Council veto froze the great-power confrontation rather than resolving it. The half century covered by Period 7, which had opened with the United States as a continental republic with a thin Pacific coastline, closed with the United States as the leader of one of two armed camps that would together divide the world for the next four decades (KC-7.3.III.E).

A diplomatic lesson works best when it samples the structural documents that built the postwar order. The four excerpts below mark the financial, political, doctrinal, and visual threads of the settlement.

1. (Causation) Account for the design of the Bretton Woods system in July 1944. Identify two specific features of the U.S. economic position in 1944 that made it possible for the United States to anchor the new international monetary order, and one specific concession the United States made in the agreement.
2. (Comparison) Compare the Yalta and Potsdam conferences along three axes: the leadership of each delegation, the territorial position of the Red Army, and the postwar issue most argued at each meeting. What does the comparison tell you about the deterioration of the U.S.-Soviet relationship between February and August 1945?
3. (Continuity and Change) Account for the differences between the United Nations of 1945 and the League of Nations of 1919. To what extent did the founders of the United Nations succeed in fixing the structural problems that had crippled the League?
4. (Causation) The Truman administration framed the Truman Doctrine and the Marshall Plan as paired responses to a single problem. Identify one piece of evidence supporting that framing and one piece of evidence complicating it. Which doctrine do you find more important to the construction of the postwar order, and on what grounds?
5. (Continuity and Change) Account for the U.S. shift from interwar isolationism in the 1930s to the peacetime military alliance with Western Europe established by the North Atlantic Treaty in April 1949. Identify two specific events between 1944 and 1949 that produced the shift.

Draft alignment — pending educator review. AP USH codes correspond to the official College Board Course and Exam Description (Effective Fall 2023, Version 1). Statements below are paraphrased in the CountryReports voice; refer to the College Board's published CED for verbatim wording.